Author Topic: Car questions - mostly insurance costs  (Read 3345 times)

epipenguin

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Car questions - mostly insurance costs
« on: October 17, 2014, 01:41:25 PM »
Sorry, these questions have probably been asked to death, and I did try searching but didn't really find anything on point. So...I seek help reducing car costs.

I have a 2010 model Toyota Prius. It's fully paid up - I bought it for cash, and ever since I bought it, I have been putting money away in a savings account for the next car. I've reduced my mileage a lot, but not to real Mustachian levels yet. At the moment, I don't want to give up having a car until my boyfriend and I move in together, and/or I can work a bit closer to home. Either of those things could happen in the next couple of years. But I feel a bit stuck at this point because while I could (and should) bike to work more, reducing my mileage further does not seem to really reduce my costs much, as insurance, maintenance, and saving for the next car are the biggest expenses. I also don't necessarily want to stop saving for the next car yet, even if there's a chance that there may not BE a next car, because life can change - at least that money is still available to me and could be used for other things should I decide to drop the car completely.

According to Mint, my average monthly auto spending since I started tracking in July 2011 has been $278, but if I just look at the last 12 months I've brought that down to $197. These costs include gas, insurance, repairs/maintenance, and occasional parking charges. The decrease in cost is mostly due to not spending a fortune getting my car serviced at the dealer any more, and reducing driving. I put $175 a month aside to save for the next car, which is not included in the $197.

1. How do you guys save on insurance costs? My last insurance payment was $758 for 6 months, so that's $126.33 a month. I got quotes from a few different companies, and could have reduced this by a couple of dollars if I switched company, but not by that much. Most of the quotes I got were for more than this. I live in FL which is not a great place for cheap insurance for anything, it seems. I have also played around with reducing my coverage, and again, it doesn't seem to change things substantially. I'm also not even sure what is the most bang for my buck with car insurance. I don't want to be sued and lose all my savings, and equally don't want to be on the hook if I hit a Bentley or something. Is there a Mustachian recommended level of insurance coverage?

2. With a paid off car which has great gas mileage, is it worth changing to something cheaper? It's not like I'm going to find much better gas mileage than I currently get, and gas is running me about $48 a month on average in the last 12 months. But perhaps a cheaper car would cost a lot less to insure? At what point does the increasing age of my car start to impact insurance costs?

3. I'm learning a bit with the car maintenance, and my boyfriend is teaching me some of the simpler things so I know how to do them myself. But really I'm not ready to change the oil myself yet, for example. Can someone recommend a good website where I can learn how not to get ripped off at an oil change place? Like, how do I know when I really do need them to replace the cabin air filter, or whatever?

Thanks for any help you can give.

TN_Steve

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Re: Car questions - mostly insurance costs
« Reply #1 on: October 17, 2014, 03:58:22 PM »

1. How do you guys save on insurance costs? My last insurance payment was $758 for 6 months, so that's $126.33 a month. I got quotes from a few different companies, and could have reduced this by a couple of dollars if I switched company, but not by that much. Most of the quotes I got were for more than this. I live in FL which is not a great place for cheap insurance for anything, it seems. I have also played around with reducing my coverage, and again, it doesn't seem to change things substantially. I'm also not even sure what is the most bang for my buck with car insurance. I don't want to be sued and lose all my savings, and equally don't want to be on the hook if I hit a Bentley or something. Is there a Mustachian recommended level of insurance coverage?


We've found the best way to save is to drop everything but liability coverage and the umbrella (necessity for us).  If you can afford to buy a "new to you" car out of pocket if a tree were to total the Prius, you can do the same.   So no comprehensive or collision coverage. 

epipenguin

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Re: Car questions - mostly insurance costs
« Reply #2 on: October 17, 2014, 04:34:55 PM »
Thanks TN_Steve. I just tried running a few different options at the insurance company website, and it seems that the liability coverage is the bulk of the cost. Still, every little bit of saving helps.

DarinC

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Re: Car questions - mostly insurance costs
« Reply #3 on: October 17, 2014, 05:48:55 PM »
I'd look for another company. My wife pays something like $460 every six months for her 2014 Prius with a $1k collision/$0 comprehensive/max everything else through h8 farm. Granted, my family has something like four cars and three homes insured through the same agent, but that's a lot of money.

StangStache

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Re: Car questions - mostly insurance costs
« Reply #4 on: October 18, 2014, 08:06:02 AM »
As others have said, dropping comprehensive and collision (which is higher on relatively new cars) is usually a good first step.  Especially since you have the discipline to "self insure" that low-payout coverage. 

I just made a thread about this a few weeks ago:

http://forum.mrmoneymustache.com/ask-a-mustachian/new-to-forums-insurance-questions/msg407563/#msg407563

Unfortunately, when I dropped my comprehensive and collision, my liability premiums rose 50%, so I wasn't saving as much as you would think.  Summary of our discussion in that thread: it looks like dropping my coverage down to lower levels made me more of a risk, so the underwriting for liability coverage reflected that in the higher premium.  I still save a few hundred bucks per year by dropping comp/coll, but I was somewhat disappointed by the amount.

I would suggest talking to your agent and find out how much you would save by dropping comp/coll vs raising your deductibles to the highest amount. 

Regarding maintenance costs:  Changing oil is one of the easiest things you can do with a car, so don't be afraid!  If you're scared to jack up your car or drive it on rhino ramps, you can still stick to cheap oil change deals at jiffy lube, but ignore the suggestions to do all of other minor things you can do yourself, like air filter.  Filters are easier to change than oil.  So are wipers, washer fluid, etc. 

BlueMR2

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Re: Car questions - mostly insurance costs
« Reply #5 on: October 18, 2014, 11:08:41 AM »
Collision can easily be over half of your insurance bill.  Whether or not it makes sense for you to drop it depends on the amount of financial risk you're willing to take.  No change in our other portions (liability/medical/comprehensive) upon dropping collision.

Comprehensive is really cheap on our vehicles, so I keep it.  Newer vehicles (especially those on the most stolen list can be quite high).

StangStache

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Re: Car questions - mostly insurance costs
« Reply #6 on: October 18, 2014, 11:33:03 AM »
No change in our other portions (liability/medical/comprehensive) upon dropping collision.

That's what I assumed would be the case for me, too.  I wish it were.  I don't understand why my company itemizes premiums if those amounts are dependent on each other. 

Each company is different though.  I suspect my situation was uncommon.

ragnathor

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Re: Car questions - mostly insurance costs
« Reply #7 on: October 18, 2014, 02:07:37 PM »

3. I'm learning a bit with the car maintenance, and my boyfriend is teaching me some of the simpler things so I know how to do them myself. But really I'm not ready to change the oil myself yet, for example. Can someone recommend a good website where I can learn how not to get ripped off at an oil change place? Like, how do I know when I really do need them to replace the cabin air filter, or whatever?


As someone state, cabin air filter and engine air filter are one of the easiest things to change. You can youtube it. I do this and don't know how to change my oil. Just follow your car manufacturer's recommendations. I have a Toyota Camry and do this every 15k miles and it costs ~$15 on Amazon, and about 15 minutes of work. The dealer will charge $50-100 for this.


I would suggest talking to your agent and find out how much you would save by dropping comp/coll vs raising your deductibles to the highest amount. 


We have Esurance and can make change the different options and see what the effect on our premium will be before submitting. They also offer extra discounts (higher level education, purchasing online, DriveSense monitor). I'm sure many of the big insurers have these same options.

epipenguin

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Re: Car questions - mostly insurance costs
« Reply #8 on: October 20, 2014, 12:33:13 PM »
As others have said, dropping comprehensive and collision (which is higher on relatively new cars) is usually a good first step.  Especially since you have the discipline to "self insure" that low-payout coverage. 

I just made a thread about this a few weeks ago:

http://forum.mrmoneymustache.com/ask-a-mustachian/new-to-forums-insurance-questions/msg407563/#msg407563

Unfortunately, when I dropped my comprehensive and collision, my liability premiums rose 50%, so I wasn't saving as much as you would think.  Summary of our discussion in that thread: it looks like dropping my coverage down to lower levels made me more of a risk, so the underwriting for liability coverage reflected that in the higher premium.  I still save a few hundred bucks per year by dropping comp/coll, but I was somewhat disappointed by the amount.

I would suggest talking to your agent and find out how much you would save by dropping comp/coll vs raising your deductibles to the highest amount. 

Regarding maintenance costs:  Changing oil is one of the easiest things you can do with a car, so don't be afraid!  If you're scared to jack up your car or drive it on rhino ramps, you can still stick to cheap oil change deals at jiffy lube, but ignore the suggestions to do all of other minor things you can do yourself, like air filter.  Filters are easier to change than oil.  So are wipers, washer fluid, etc.

Thanks for the thread link. I couldn't find that before by searching.  And I thought I was going crazy playing around with coverage on the insurer's website. When I dropped or reduced some coverage options, the cost actually went up. I guess you're right that dropping some things makes you (appear) more of a risk.

I'm going to change the wipers this weekend. The bf has already taught me how to do the washer fluid and it's probably time for a top up. And thanks also for the tip on how to handle Jiffy Lube!

epipenguin

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Re: Car questions - mostly insurance costs
« Reply #9 on: October 20, 2014, 12:40:24 PM »

3. I'm learning a bit with the car maintenance, and my boyfriend is teaching me some of the simpler things so I know how to do them myself. But really I'm not ready to change the oil myself yet, for example. Can someone recommend a good website where I can learn how not to get ripped off at an oil change place? Like, how do I know when I really do need them to replace the cabin air filter, or whatever?


As someone state, cabin air filter and engine air filter are one of the easiest things to change. You can youtube it. I do this and don't know how to change my oil. Just follow your car manufacturer's recommendations. I have a Toyota Camry and do this every 15k miles and it costs ~$15 on Amazon, and about 15 minutes of work. The dealer will charge $50-100 for this.


Good to know! I'll aim for doing all the easy stuff myself first, while still getting the oil changed at Jiffy Lube, and then maybe tackle the oil change situation later when I'm feeling more badass.